FG Trade / E+ / Getty Images

What happens to unpaid credit card debt after seven years?

Delinquent debt eventually falls off your credit report, but you still have to pay it back – even if you can’t be sued for it


Most of us don’t intend to get in over our heads with credit cards, but it happens. And in some cases, that debt can drag on for years, bringing your credit score down with it. Let’s look at unpaid credit card debt this week and see what we can find out.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Do you remember how you felt when you got your first credit card? I’d be willing to bet that your first thought was not, “Now I’m going to buy a bunch of stuff and not pay my bill and see what happens.”

I don’t believe anyone intends to get in over their heads with credit cards, but unfortunately it happens all too often. And in some cases, that debt can drag on for years, bringing your credit score down with it. Let’s look at unpaid credit card debt this week and see what we can find out.

Check out all the answers from our credit card experts.

Ask Steve a question.

How long does a delinquent debt stay on your credit report?

As you know, your credit score is calculated from information on your credit report. Credit card issuers report their customers’ histories to the credit bureaus, beginning with when you applied for the card. From there, your transactions are reported about every month. These include both the amounts of charges and payments you made and the dates those things happened. If you paid at least your minimum payment by the due date, you will get good marks for paying on time, as agreed.

But if you are late paying your bill, it may be reported, which can hurt your credit since payment history makes up 35% of your overall FICO score. This only happens if you go beyond the 30-day late mark. You will likely incur a late fee if you are even a day late, but you probably won’t be reported. (A notable exception to this rule is for medical debts. They are not reported until they are six months old, allowing for deciphering of cryptic medical statements and the glacial speed of insurance company reimbursements.)

For all other bills, if you don’t make at least the minimum payment by the due date, you will be reported late after 30 days. If this continues, you will be reported the next month as 60 days late, with calls likely becoming more frequent. Eventually, you will be 180 days late and your account will be charged off. Now you run a serious risk of having your account turned over to or sold to collectors.

These delinquencies will remain on your credit report for seven years. The seven-year period starts from the original delinquency date (the date the account was first reported late). For charged-off accounts the seven years starts from the date the account first became late and was never brought back to current. These are the points that start the clock on the seven years it will take for the debt to fall off of your credit report.

See related: How to pay off a debt in collection

What is the statute of limitations for unpaid credit card debt?

The seven years used for credit reporting has nothing to do with the statute of limitations, because this is dependent on the state in which you live. What is the statute of limitations (SOL)? SOLs go way back to early Roman law and were designed to prevent fraudulent and stale (really old) claims from arising after all the evidence was lost or after the facts became obscured by the passage of time, defective memory or the death or disappearance of witnesses. I’ll leave that last one to your imagination.

The SOL limits how long a creditor has to take you to court and sue you for delinquent debt. Once your debt ages past the statutory time limit of your state, you cannot be sued in a court. Expect a flurry of activity in the months leading up to the SOL date. Why? Because in some states, if the collector can get you to make any payment at all, it will reset the clock and you will be vulnerable to court action for another full cycle.

State statutes range from three to 10 years. Be aware that to use this protection, you must show up before the court and answer the complaint. If you don’t, you waive the use of this defense and aren’t permitted to use it in any subsequent proceedings.

Do you still have to pay if the debt falls off your credit report?

Yes! Just falling off your credit report after seven years has nothing to do with the SOL. But, if you can’t be sued for the debt if you pass the statute of limitations, does that mean you never have to pay? Alas, not!

Even though the debt is time-barred from legal action, you still owe it and will continue to owe it until you pay. Stale debts, as they are known in the industry, are still pursued by specialized collectors who buy them on the cheap, hoping to get you to pay at least something to make them go away.

You may be able to work out a deal with the creditor to pay less than you owe (otherwise known as settling the debt) or come to another type of agreement that will satisfy the debt. But until that happens, you still owe the debt. To shut the collection process down, I suggest that you refer collectors to your attorney. No collector I know of will pursue a debt that is past its SOL with a lawyer. It’s a waste of time and resources.

See related: What happens if you ignore debt collectors?

How to avoid delinquent debt

Balance transfer

Before things get out of control, you may want to consider a balance transfer credit card. These offers usually involve a fee, but they may help you lower your interest rate so you can pay off the debt sooner. Many balance transfer cards offer introductory 0% APRs, with some lasting as long as 18 months. They will also reset the debt’s aging on your credit report. For example, a debt that is 60 days old on your Citi card will become current when transferred to another creditor.

Personal loan

You could also look into a personal loan to pay off your credit card debt. A loan like this typically offers an interest rate that’s lower than a credit card. If you can do this before you reach the point of serious delinquency, you may even be able to keep your card(s) open and help your credit score in the process.

By keeping the cards open, you will keep the available credit and improve your credit utilization ratio. The personal loan will be installment credit, as opposed to the revolving credit you have on your credit cards. This will help your credit mix, another factor in your credit score. A mix of both types of credit – revolving and installment – is what is best for your score.

I do not advise getting rid of credit card debt by using a home equity line of credit or loan. This magically transforms the debt from an unsecured debt to one that is secured by your home. Being unable to pay a credit card bill may result in credit damage; being unable to repay a loan secured by your home may make you homeless.

Debt settlement

As noted above, you may be able to settle your debt for less than you owe. You should know that if the forgiven amount of debt exceeds $600 you will likely have to pay taxes to the IRS on that forgiven amount. If you go this route, be sure to get all the terms in writing before you send any money. I further suggest using an attorney to negotiate on your behalf (or do it yourself), but stay away from a debt settlement company.

See related: Why did my credit score drop after paying off credit card debt?

Credit counseling

Settling a debt is an adversarial process and you may understandably feel overwhelmed by the prospect. If so, a call to a non-profit credit counseling agency is an option I like for daunting debt of any kind – be it delinquent, in collection or just too much. I call them the “good guys” because they will look at your situation in total and help you come up with the best solution for you.

Settling may be an option or even bankruptcy, but you might also benefit from a debt management plan offered by a non-profit member of the National Foundation for Credit Counseling. It offers a creditor-approved systematic process of repaying debt in full in five years or less, usually at a reduced interest rate. You can find out more by checking out nfcc.org.

Bottom line

If you have unpaid credit card debt sitting on your credit report, I would strongly suggest you do something. Pretending debt will go away will not make it happen. But you can by taking action.

Remember to keep track of your score!

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more